What role can the City play in improving Britain’s economic prospects? And might it at the same time restore its own reputation and morale?

The City’s job is to put money to use. There is no shortage of money, thanks to the Bank of England’s indispensable programme of quantitative easing. But QE in some ways resembles the artificial seeding of clouds after a period of drought. Rain has fallen, catastrophe has been averted, but much of the water lies in stagnant pools on the baked ground (so that some people worry about flooding, in the form of inflation). The City has the pumps and the hydraulic engineers.

Banks’ willingness to cut their profitability targets, as many have now done, is a matter of the first importance. The collapse in long-term interest rates, now in its fifth year, has reduced the cost of capital for all business. At the same time, the reduction in financial leverage that regulators are imposing on banks should reduce the cost of bank equity further, even if bank debt finance becomes riskier for the lender and thus dearer.